Accounting for IGCSE & O level - The Fundamentals Of Accounting (Section 18 - No. 26)
When a company receives cash from a customer for services to be performed next month, what should be done?
Debit Cash; Credit Service Revenue.
Debit Unearned Revenue; Credit Cash.
Debit Cash; Credit Unearned Revenue.
Debit Service Revenue; Credit Cash.
Explanation
The entry recognizes an increase in cash (asset) and an increase in unearned revenue (liability).
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